Granite Ridge Resources Inc

Granite Ridge Resources is targeting positive free cash flow by 2027, with a free-cash-flow yield above 10%, dividend coverage of at least 1.25 times, and continued production growth. The company is shifting capital toward operated partnerships, which management says offer strong returns and support high-single-digit production growth while helping reduce leverage. Planned development spending and acquisitions are expected to total in the high-$300 million range. Granite Ridge believes its enterprise-value multiple of 2.7 times—below mid-cap and Permian-focused peers—could rerate as cash flow improves, while a potential share distribution by a Grey Rock fund may increase the public float and end its controlled-company status.

Granite Ridge Resources indicated that a $65 oil price would support a 10% free cash flow yield in 2027, alongside a dividend coverage of 1.25 times, leverage around 1.25 times, and high-single-digit production growth. The company also raised its full-year lease operating expense guidance to $8.25–$9.25 per barrel of oil equivalent, citing water handling costs in the Permian and higher early-life costs on newer pads. Second-quarter production averaged 32,044 barrels of oil equivalent per day, 51% oil, generating $79.6 million in adjusted EBITDAX and $149.3 million in oil and natural gas sales. Additionally, Grey Rock Investment Partners plans to distribute a portion of its Granite Ridge shares to limited partners in the third quarter, which will reduce its ownership below 50% and end Granite Ridge’s controlled-company status.